Trading Kroger Out For a Monthly Dividend


I've sold another position within my portfolio sooner then anticipated. I had purchased Kroger a few months ago during the dip expecting it to recover quicker then it has. I figured it's a great company and it was trading at a value in comparison to its 52 week high. I was just sick and tired of the volatility in the sector. Every time a competitor announced any small thing related to online delivery ect the stock would take a hit. 

The stock didn't recover like I was hoping and I was only looking at the position as a short term anyways since their are way better dividend companies that offer better appreciation value and dividend yield currently. I would have liked to stick around but in my opinion when a company has been beaten down over speculation and after the company releases great earnings statements the company should see a slight recovery. This however wasn't the case with Kroger. They took another 7% decrease on Friday and I was simply over it. 

I managed to liquidate my position at $21.57 per share. I took a very small lose of $53 dollars which is fine by me. I also turned some of the capital right around and finally picked up a monthly paying dividend stock. I have had my eyes on many stocks lately and it's been a struggle for me to pinpoint which ones I want to purchase into lately. A few of my positions have taken nice loses and I've been trying to fight with either adding to my current position or open up new ones. I've also really liked initiating positions within companies that are closing in on their ex dividend date. I feel that the companies have a little less volatility around this time and ensures I get the next payout.

I have a pretty big watch list lately and I have really been trying to expand my portfolio. I have had my eyes set upon a few monthly paying dividend stocks lately and I've finally purchased my first one. I purchased 25 shares of MAIN at 39.08 per share which affected my Annual Expected dividend income by $57. With so many monthly paying dividend stocks in the market I had to do a bit of research around which one I wanted to jump into. After eliminating my KR position this company is now my 19th holding which still sets me 1 holding away from hitting my goal.

O has long been a dividend investor stock favorite but personally didn't feel comfortable with the negative revenue growth and outrageously high payout ratio of 219%. 

I was also Looking into STAG but I wasn't liking how high the P/E was at 86 and an even higher payout ratio of 486% I'm really confused at how these companies can continue dividend payments with such high ratios. 

This left me at the last and best monthly paying dividend company that I know of which is MAIN. Sporting a healthy payout ratio of 74%, generous yield of 5.81%, two recent analyst buy upgrades with a price target of $41 and 5.55% average 5 year dividend growth rate the choice was obvious. I have also really wanted to get my hands on a monthly paying dividend stock so I could take advantage of compounding my money quicker and I like the idea of receiving a dividend from a company on a monthly basis.

It may not be a whole lot of extra monthly income but it's a small start and it will slowly start accumulating quicker and quicker as the months pass on. If we see a nice dip within the company or even if it stays at these levels I may be tempted to up my position sooner then later. I still have my eyes on a few more names such as the usual EMR, ED, PG and also MO. I've really been debating if MO will be my next purchase. The ex dividend date is approaching and I would really like to get into it to get the dividend. The only thing holding me back however is the current down trend within the cigarette industry. 

I also have my eyes on T once again as they have just broken a new 52 week low even though they had an amazing earnings report last quarter. They are also near the end of the Time Warner Acquisition and from that point on I could easily see T returning to the $40 levels. The only thing is T is already a very large position in my portfolio accounting for 14% of it. I've also been leaning towards liquidating more of my F shares in order to transfer more funds into T. 

With so many great opportunities in the market we will wait and see what next week holds and what moves I decide to take. One thing is for sure however, I want to continue to diversify and grow my portfolio positions and continue to expand the holdings within the Independence Fund. I know for sure I will be hitting my annual goal of 20 companies within my portfolio and I may even surpass it by 1 or 2. 

Thanks for stopping by and happy trading everyone. I hope everyone has a successful week and makes some good trades.